Bruchac v. Universal Cab. Co.

580 F. Supp. 295, 5 Employee Benefits Cas. (BNA) 1697, 1984 U.S. Dist. LEXIS 20190
CourtDistrict Court, N.D. Ohio
DecidedJanuary 23, 1984
DocketC79-155
StatusPublished
Cited by8 cases

This text of 580 F. Supp. 295 (Bruchac v. Universal Cab. Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bruchac v. Universal Cab. Co., 580 F. Supp. 295, 5 Employee Benefits Cas. (BNA) 1697, 1984 U.S. Dist. LEXIS 20190 (N.D. Ohio 1984).

Opinion

MEMORANDUM OPINION

DOWD, District Judge.

Plaintiffs, Edward Bruchac, Lydia MacDonald, Hazel Reaves, and Clara Payne, filed the above-captioned case as a class action against defendants, William Klugg, United Garage and Service Corp. of Cleveland, Inc., Yellow Cab Co. of Cleveland, Inc., Zone Cab Corporation, Universal Cab Company, Yellow Cab Limousine, Inc., Arthur McBride, Jr., and John Doe fiduciaries alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. and the Labor Management Relations Act (LMRA), 29 U.S.C. § 185. Before the Court are cross-motions for summary judgment in which the parties raise the following issues: whether the nonforfeitability provisions of ERISA, 29 U.S.C. § 1053, apply to the plaintiffs’ pension plan and whether the defendants breached the pension plan agreement as provided in the collective bargaining Agreement. For the reasons which follow, summary judgment is granted in favor of the defendants with regard to plaintiff Lydia MacDonald and the class she seeks to represent, on counts two and four of the complaint; defendants’ motion for summary judgment is denied with regard to all other plaintiffs on counts two and four; summary judgment is granted as to liability only, in favor of plaintiffs Bruc-hac, Reaves, and Payne on counts two and four; plaintiffs’ and defendants’ motions for summary judgment are denied with regard to all plaintiffs on count three.

*297 PROCEDURAL BACKGROUND

A status call was held in the above-captioned matter on January 14,1983. At that status call it was agreed by counsel for the parties that the Court would rule first upon the motions for summary judgment with regard to Counts two, three, and four of the complaint which relate to the plaintiffs’ right to pension benefits.

FACTUAL ALLEGATIONS

Plaintiffs allege as follows: they were members of Taxicab Driver’s Union, Local No. 555 and Local 507, which are affiliated with the International Brotherhood of Teamsters. A collective bargaining agreement, which provided for a pension plan, was entered into between the Union and the defendants on November 1, 1966. The original agreement provided employees who reached age sixty-five with twenty-five years of continuous full-time employment with the defendant companies, were eligible for a monthly pension payment upon retirement. The plan was amended several times to increase the benefits. In 1970, the plan was amended to allow those employees with thirty years of continuous full-time employment to retire at age sixty and those employees with twenty years of continuous employment to retire at age sixty-five.

Defendant McBride attests as follows: he is the president and the chief executive officer of all of the defendant companies. Defendant Klugg is the treasurer of all of the defendant companies. In the mid-1970’s the defendant taxicab companies began operating at a loss. To avoid this result the companies reorganized and effective June 1, 1977, began operating under a lease system. Under the lease system all taxicab drivers were terminated as employees of the defendant companies. The taxicab drivers operated as independent contractors and leased their taxis from the defendant companies. The plaintiffs’ union agreed to the change to the lease system.

Under the lease system the defendant companies provide a pension plan for mechanics and telephone room employees. The new pension plan includes as participants all retired taxicab drivers who would have been eligible under the old plan. Plaintiffs in this action were not eligible for benefits under the old pension plan and therefore, are not included as participants in the new pension plan.

Plaintiff Edward Bruchac alleges that he was employed by the defendant companies for twenty-two years and eleven months and that he was fifty-six years of age when his employment was terminated in June, 1977.

Plaintiff Lydia MacDonald alleges that she was employed by the defendant companies for nineteen years and eight months and that she was sixty-one years of age when her employment was terminated in February, 1975.

Plaintiff Hazel Reaves alleges that she was employed by the defendant companies for nineteen years and ten months and that she was fifty-six years of age when her employment was terminated in June, 1977.

Plaintiff Clara Payne alleges that she was employed by the defendant companies for twenty years and three months and that she was fifty-two years of age when her- employment was terminated in June, 1977.

DISCUSSION AND LAW

Plaintiffs allege that certain minimum rights in the pension plan 1 became vested on the effective date 2 of the nonforfeiture provisions of ERISA, 29 U.S.C. § 1053.

In count two plaintiffs allege that the pension plan was a part of the Collective Bargaining Agreement between the defendant companies and plaintiffs’ union. Plaintiffs further allege that the nonforfei-ture provisions of ERISA became a term of the pension plan and therefore; the denial *298 of plaintiffs’ pension benefits was a breach of the collective bargaining agreement pursuant to 29 U.S.C. § 185.

In count four plaintiffs allege a straight violation of the nonforfeiture provisions of ERISA. Consequently, for plaintiffs to succeed on counts two and four of the complaint the nonforfeiture provisions of ERISA must apply to the plaintiffs’ pension plan. Because counts two and four are premised upon vesting claims pursuant to ERISA, they will be consolidated for the purpose of discussion of the summary judgment motions.

I. ERISA Claims.

Title IV of ERISA, 29 U.S.C. § 1301 et seq., establishes the Pension Benefit Guaranty Corporation (PBGC). The PBGC insures employee pension benefits of certain pension plans. If the PBGC makes payments to employees, it has a right to reimbursement from the employer. 29 U.S.C. § 1303, 1362. The PBGC does not guarantee all pension plans. The plan must meet certain statutory requirements before it will be insured. 3

Title I of ERISA, 29 U.S.C. § 1053 provides that “an employee’s right to his normal retirement benefit is nonforfeitable.” The benefits become vested after a minimum length of service which can be calculated under three formulas. 4

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Bluebook (online)
580 F. Supp. 295, 5 Employee Benefits Cas. (BNA) 1697, 1984 U.S. Dist. LEXIS 20190, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bruchac-v-universal-cab-co-ohnd-1984.